I've got a couple of judgements on my credit report filed on 11/2005 and 8/2006. Both are with Discover Bank. A year or so before, I was unemployed, pretty much living on my credit cards when it all just sort of overwhelmed me. I was in the process of paying off cards/accounts and settled some. These two, however, weren't willing to work with me or wait on me. They have pretty much just sat dormant since they acquired the judgement. I guess I thought they would write it off and then at some point it would fall off my credit report. Fast forward to today, my wife and I are debt free except for our Mortgage and a car loan (ie. no credit cards at all). We are looking to sell our house and downsize. As we've talked to a couple of mortgage brokers, we've learned that the judgements are going to be a problem and that we should try to settle them and hopefully get them removed from our Credit Reports. I've searched past posts, the only thing I could find recommended "leaving the sleeping dog lie." Stirring them up could only make things worse. I'm not even sure who I would contact to see if a settlement is possible. I definitely could not affoard to pay off thier claimed face value of the debt (ie. original loan amount, late fees, over limit fees, legal fees, and interst accrued from the initial late payment to date). Should I hire an attorney to help settle these? Any suggestions would be greatly appreciated.
Hi Kowboy335 Congrats on get back on your feet and leaving CC debt free that is a feat to be proud of. Not knowing the value of the judgments or what state you are in you should ask yourself some questions. What is the SOL on collections of a judgment in your state? Is it renewal able? What is the law on dormant judgments; in some state dormant judgments are not renewal able. Found out how much more time they have to try to collect from you. What is exempt in your state? Not knowing what state you are in, there are exemption values on wages and property; learn what they are. What is your timeline for purchasing the new home? Is it a need to move or a desire to move; could it be delay? The broker is correct you most likely not be approved for a mortgage with open judgments. If the move is desire over a need, and you donâ??t have the cash on hand to pay in full IMHO I would allow this sleeping dog lie while you get your ducks in a row. May I suggest the following? Get any down payment money out of the bank that last thing you need is wake up to a writ of garnishment against your bank account and watch all that hard work go away. I read about a guy who pulled his cash out of the bank once a default judgment was issued, he then opened a secured CC using that cash which was un-garnishable. Granted he didnâ??t earn any interest but he didnâ??t lose any either as a WOG was issued against his bank account within 6 weeks of the judgment. Small bonus he did boost his credit score a little as the card reported with high limit and if he used it he paid it off monthly. Was the card a joint card? If not read up on collection on spouse (I canâ??t remember the correct term) in your state, you might be able to move the cash to your wife. Reduce your exemptions on your pay check, in some states your state income tax refund can be used to satisfy a judgment. These of course are opinions and I am not a lawyer (nor did I stay at a Holiday Inn Express last night) but I would educate myself example if your stateâ??s SOL is 10 years non-renewal I would let it lie. But if itâ??s 10 and renewable or even 20 years I would look for a free consult to see what my options are.
How do the judgements appear on your credit reports? Do they list the lien holder? If you want to satisfy the judgement, you'll need to contact the lien holder directly and negotiate a deal or set up a payment plan that you can afford. That's not going to help improve your credit score though. However, a "paid" judgement will look better to an underwriter than an unpaid one.
Thanks for the feedback! I live in Texas and the judgements were filed here. One is in my name and the other is in my wife's name. Although my credit reports indicate that the judgements might fall off my report after 7 years (possibly 8/2012), I believe the SOL in Texas is 10 years, and then the plantiff can renew the debt, which keeps it active for another 10 years. Desdemona, you suggested free consult - who would you suggest? The purpose of our move is to size down, would cut my mortgage payment down to $400 - $600 from $1,800/mo and every other related expense would drop as well (ie. Prop. Taxes, Ins., utilities, etc.). Also, if I were able to pull off the move, I would have about 75% equity in the property. I'd owe about $75K on a $250K property. The pay off on my current mortgage is about $132K. So, with regard to attempting to get mortgage financing, it doesn't matter what my credit score is (now 604, 610 and 624) - it could be 700 + and because of the open judgements, any lender will want to see them settled before they will loan to us? Searching the internet, I found an article that suggested that I first ask the CRA to validate the judgement. The CRA must then request the court to validate the debt, and the whole process must occur within 30 days. The article suggested that because the courts are generally backlogged, it often times takes them longer than 30 days to validate the judgement. So the CRA must pull the judgement from your credit report. In line with the above validation process, does it make sense to ask the CRA to validate any and all of my negative items on my credit report? Do I request all three CRA's to validate, or just one? I also saw a post or an article that indicated you need to be careful if you launch an all out attack on your negative credit entries, as the CRA will easily see your strategy and will be less cooperative. I don't really understand that, if you ask a CRA to validate 1 entry or 50 entries - aren't they obligated to validate the entry? At this point, and I'll wait to hear your advice, but I think the validation method on these judgements might be a good first step. Then I can try to muddle my way through the settlement process. If I go the settlement route, the fact that it is settled allows me to get a mortgage (subject to my overall score) but it's not really going to improve my score? Can I negotiate a "Judgement Vacated" or somehow get them to remove it from my credit report as a condition to the settlement? I really appreciate your responses!
Well a Google search brought up a site www lanwt org which listed 79 law clinics in North West Texas â?? donâ??t know where you are in Texas but this is what I am talking about for free advice. Most of the clinics require income limits but some are open to the public. There is a Legal Line sponsor by the Houston Bar Association that is held the 1st and 3rd Wednesday of the month from 5 â?? 9. (Today) Check the Houston Bar website for the number. I would check local law schools and libraries for clinics or your countyâ??s bar association as attorneyâ??s need x amount of pro bono hours and most do the community clinics or help lines. Also check to see if your or your wifeâ??s employer has an employee assistance programs that offer referrals for attorneys with 1 or 2 hour free consultations as well as discounted rates. I got my divorce lawyer that way â?? he sat with me and mother for 3 ½ hour no charge and gave me a flat fee 400 less then my exâ??s lawyer and I got the everything I wanted in the divorce and he walked away trying to figure out how did he agreed to pay for a full summer of daycare @ 340 per week for 12 weeks. Good news â?? there is no wage garnishment and your homestead is exempt from liens and Texas does not allow for state income tax refund garnishment. Bad news â?? they can garnish your bank account as wages lose their status of wages as soon has they hit your bank account. I would look into having money deposit into an exempt account so you donâ??t lose any down payment money. As for the judgment vacated â?? to vacate a judgment is to show cause that you 1 you have/had an excuse to why you did not show in court or 2 you were improperly serve. To vacate judgment must be done within a very short window after the judgment has been issued â?? I would check Texas law on the timeframe. I would try the validation method with the CRA first, since itâ??s been 5 and 6 years now you might have some luck. Good luck
A word of advice, the credit reporting agencies do not verify the accuracy of public records with any courthouse. Lexis Nexis does all of the reporting and verification. Accordingly, you would submit a dispute to each credit reporting agency finding something within the public record that is inaccurate or incomplete. The more data fields the better. Chances are the judgment will be verified. Thereafter, contact the clerk of the court wherein the judgment was filed and see if they will give you documentation as to whether anyone contacted them regarding the case. If so, great. If not, ask the credit reporting agencies for a description of the procedures they used to verify the accuracy of the public record. This can, on occasion, lead to deletion. If you get a letter from the clerk, send that along with the request and that should lead to deletion.
Hi I was hoping if you can help me with some question .I just have the same thing as far the house and collection agains me. I am trying to refinance also,but I have a collection agency after me,and it reporting on my credit report. Do you thing I need to setell before I can refinance? How about credit scoore do I need higher score to be approved for the loan? What bank or loan company the accepet lower score? Thanks for your help,and good luck with you things.
You probably won't be able to refinance with a collection on your credit reports, and you'll want a FICO score that's at least above 750. What are your FICO credit scores now? Check with a local credit union to see what their minimum standards are, as they will be more likely to work with you than a large national bank.
